S/4 HANA Migration and SAP WM

Which strategy is the best for your switch to EWM?

Companies using the SAP Warehouse Management (WM) module and looking to switch to S/4HANA On-Premise are faced with the decision of how to map their warehouse management in future. Often there is a vague idea that after 2025 SAP support for WM will expire and that they should orient themselves towards EWM. But what exactly does this mean and what options are available under S/4HANA? The following illustration should give you a clear but precise picture of the situation without getting lost in the often confusing terms of the SAP world.

WM in S/4 HANA On-Premise / Stock Room Management

The warehouse management tool WM which is already common to you from the actual SAP ERP system is also available in S/4 HANA. But it is on the so-called “Compatibility Scope Matrix for SAP S/4 HANA On-Premise” which you can have a look at in the OSS-Note 2269324. For all functionalities named there, the right of use expires on 31.12.2025. That means that not only the support is going to end but also that WM must not be used anymore in S/4 HANA after 2025.

At the end of June 2019, SAP modified its licensing strategy once again. Under the name "Stock Room Management", part of the WM functionalities will remain available after 2025. However, this module will not be further developed. You can read more details and omitted functionalities in this SAP blog post.

Decentral EWM

SAP calls the Extended Warehouse Management (EWM) as target architecture which is available in different versions in S/4 HANA. You can differentiate between a decentral EWM which runs on a separate system and the Embedded EWM which has been integrated into S/4 HANA since release 1610. If for performance reasons, decentralized EWM was still used in SAP ERP, this is at least partly offset by the use of the powerful HANA database. Still, there can be some good reasons for choosing a decentralized EWM such as being able to connect several ERP-Systems to a single EWM (recommended for warehouse service providers) or separating ERP and warehouse management for security reasons. But you have to be aware that you pay for the effort of the interface. So if the decision is made to use a decentralized EWM, there are two options: SAP EWM 9.5 and the now more powerful "Decentralized EWM under SAP S/4HANA". Since the differences between these two options would go beyond the scope of this article, please refer to OSS note 2840129.

Embedded EWM

If you choose the Embedded EWM you also have two possibilities. Companies that have been satisfied with the functions of WM are likely to choose the Basic EWM. No additional license fees apply. If you want additional functionalities such as a connection to a material flow system, Value Added Services or Yard Management, the customizing settings can be changed to Advanced EWM. Now the same license fees apply as when using a decentralized EWM.

Our Conclusion

With Stock Room Management, SAP has created an opportunity to continue using the familiar WM functionalities - at least in part - after 2025. Those who are not satisfied with this will soon have to switch to EWM. Companies that switch from SAP ERP to S/4HANA in the future should then carefully consider whether they want to continue using WM under S/4HANA until 2025. The only reason for this may be to spread the implementation effort over time. However, this could also be achieved by connecting a decentralized EWM to your SAP ERP ahead of time - definitely the best strategy if you are aiming for decentralized EWM in the future anyway. If, on the other hand, one has the Embedded Basic EWM in mind, the total effort is the lowest to implement this immediately when introducing S/4HANA, because this saves a further migration of WM.

Finally, we can recommend OSS Note 1606493, which provides a comprehensive overview of best practices for SAP EWM deployment options.

(Status: Fall 2020)